BWB's deputy managing partner and joint head of Charity, Philip Kirkpatrick, recently delivered the keynote address at the 2016 NCVO/BWB Trustee Conference, speaking about changes in the charity sector, the possible affects of these changes, and how trustees can respond to them.

The full address can be found below.

Changed Priorities Ahead?

I saw the road sign that forms the title slide for my talk today (‘Changed Priorities Ahead’) when I was cycling through the county of Brexit the other day and had to stop to take a picture. I had been mulling over what I wanted to say today, thinking about the changed world we seem to be in and when I saw that sign it just spoke to me of the Zeitgeist. It made me think of the need to step back and consider the changes trustees are facing now and how we are going to face them.

So my theme today is what has changed, how that change might affect individual charities and how we as trustees can respond to the changes.

Before looking at how things have changed, though, what did they look like to us before?

We knew that there were needs to be met, that we could try to meet them and that we could make a difference

We knew that if we told a story well enough, if we pricked consciences, the compassion and generosity of the British people would ensure that our causes were funded - perhaps not well, but funded

We knew that we would not get everything right; we are an army of part-time volunteers. But we thought we would do our best, achieve some results and perhaps even be thanked for it

We hoped we would find this rewarding. At least, we felt we were doing our duty

We knew that our charities were trusted

Well, there have been a few changes around here. Now, we are told by the Charity Commission's biannual survey into trust and confidence in the charity sector that we are, as a sector, less trusted than the ordinary man or woman in the street. Think about it: apparently people would rather trust a stranger in a pub than a charity. At least we are more trusted than politicians, I suppose.

I do not think this is just about what charities have got wrong, although they have got things wrong and I am coming to that. This decrease in trust and confidence is in the context of a bigger societal change, where trust and confidence are in short supply. It is a world where the ground is shifting, where established order is being challenged. It is an increasingly sceptical, decreasingly rational, increasingly angry world, a post-factual world where nothing need be truer than the cynical lies written on a political campaign bus; where opinion trumps knowledge; where intolerance trumps understanding; where tomorrow Trump might trump.

When you consider the antagonistic, even vitriolic nature of our political and press discourse, let alone that of the online world, in our now very divided society, we seem only a short step away from the witch hunts of the pre-enlightenment era. Look at the headlines on Thursday when some of our national newspapers declared open season on the rule of law, the bedrock of civilised society, calling down a rain of populist hate on our country’s leading judges. There have been calls to gang-rape the woman who had the temerity to test our democratic, constitutional principles in the courts.

It is a world of quickly roused, strong feelings founded on weak understanding. Of course, people have always been most willing to believe that which confirms their prejudices; there has always been a greater appetite for scandal than for truth, fairness and tolerance. But never before now has the world had the means of communication that enables that appetite to be so quickly and easily fed. An opinion on Facebook or Twitter can quickly reach millions and by its viral spread both validate and be validated – the digital equivalent of mob rule.

That is the world into which a spate of difficult stories about charities has broken. And most likely they are going to continue to break and the monster of mistrust is going to continue to be fed for some time to come.

You are familiar with these stories:

Heartless hard-sell by some telephone fundraising companies

Use of data in ways that has caused the unexpecting to be bombarded with fundraising requests

The collapse of high profile charities

The payment of high salaries to executives

Charities being used simply to generate personal tax advantage (and I still have no idea how that is possible; indeed, I think it is not)

Questionable contractual arrangements with commercial organisations that appear to prey on our trust

The exposure of this activity has most likely been the principal cause of the decline in trust and confidence recently reported by the Charity Commission. But I think it has been aggravated by the current climate, were people simply distrust more.

I think there is also something about charities being prickers of consciences - most people actually dislike having their conscience pricked and certain sections of the media are eager to play the part of kickers of conscience-prickers. There is great joy to be found in trying to prove that those perceived as holier than thou are in fact just as unholy as thee and me.

The Charity Commission's survey report contains some very interesting statistics, especially in relation to what people say has caused their trust in charities to decrease:

33% cite general media stories

A further 32% cite media coverage about how charities spend donations

21% say they don't know where the money goes

18% refer to pressurising fundraising techniques

15% say too much is spent on advertising and wages

But one of the most fascinating, and depressing, aspects of the research is the extent of the ignorance and confusion among the respondents. People are very willing to give their opinion on how charities should be run but at the same time the survey finds that:

More than half of those surveyed agree they know very little about how charities are run and managed

Nevertheless, two thirds agree that charities spend too much on salaries and administration

Few are aware of the broad range of work that charities do

About three quarters don't even recognise that they have come into contact with a charity, without being prompted as to which organisations are charities

Only half of the sample had heard of the Charity Commission.

Some of the statements quoted from the focus groups would be funny if they were not tragic:

"They do [these appeals] every year and they say they raise all this money and they're still wanting mosquito nets."

"[With international aid charities] the money is definitely siphoned off along the process; they keep the orphans in the scruffiest state for the promotional videos."

"The problem still stays there and they are always after more money. They don't actually solve the problem."

The state of confusion is also evident in the list of most trusted and least trusted charities spontaneously named by respondents. Cancer Research UK is the most trusted charity. Brilliant. Well done. However, it is also the fifth least trusted. Oxfam is the least trusted charity. Boo hiss. However, it is also the fourth most trusted charity. Hooray! The five least trusted charities are all in the top 10 most trusted.

It is very hard for individual charities and trustees to deal with this level of ignorance and confusion about the sector as a whole. I would hazard a guess that over 90% of the population have absolutely no idea how much any charity spends on salaries and administration and that the assumptions of 75% of people would be double or treble what is actually spent by the small percentage that spend anything. And really, the public’s concern is mostly that money is spent on administration and salaries at all, not recognising that for complex charitable interventions, such expenditure is essential if anything is going to be achieved effectively with the money they donate.

According to research to be released by Nfp Synergy this week, the public thinks that donations are more likely to be spent well if charities are entirely run by volunteers. Why stop at registered charities? Surely, our taxes would be better spent and schools and the NHS would be much more effective if all the teachers, doctors, nurses and administrators were unpaid.

It is notable, of course, that people's distrust stems mostly from stories in the press. Certain sectors of the press love to vilify charities and the trustees who are ultimately responsible for them. But when one looks deeply into the stories and much of the criticism levelled against the trustees, as I have sometimes done, one generally finds the pilloried boards are comprised of good people doing their best with integrity and dedication. But that seems irrelevant in our angry, intolerant, post-factual world. In this climate, one wonders who would want to be one of us, a trustee?

Perhaps we can live with vilification but we at least need to know we will be understood and supported by our regulators. Without knowing that, who can take the risk of assuming this onerous role? To be honest, it won't take much sabre-rattling regulatory action against trustees to cause thousands of us to recognise that charity trusteeship is so fraught with risk that we are no longer prepared to undertake it. Indeed, the Nfp Synergy research to be released this week apparently shows that 27% of us are already thinking of resigning our posts. I am very pleased to hear Paula Sussex, the Charity Commission’s Chief Executive, say here today that if trustees act in good faith and make their best endeavours, there should be no regulatory action.

But however unfair and unpleasant the press coverage, there is truth in many of the underlying stories and the fact remains that decreasing trust in the broader sector could well have an impact on each of our charities. It is irrelevant that we are not all responsible; that the stories are not all fairly told; that there is and always will be tremendous ignorance about charities and their work. The climate has simply changed and we have to adapt.

Like climate change, it is only when we are well into it that we notice it at all. And now that we are into it, its reversal will take longer than its creation and we may never get back to where we started.

And like climate change, there is no point saying it is not our fault; that someone else caused it - the big charities; the public fundraising charities; badly run charities; scam-artists - we are in it; we have to adapt to it; and we have to do our bit to reverse it.

In the wonderful phrase from Lampedusa's The Leopard: "If we want things to stay as they are, things will have to change."

While we are not individually responsible for the reputation of the sector, this is a situation where, in Noam Chomsky’s words, "We are each individually responsible for our own inaction". So what can we, individually, practically, do? We may need some changed, or perhaps just renewed, priorities.

I think there are 5 things we all need to do, none of which is new but perhaps all of which could benefit from some refreshed emphasis:

1. We need ensure, and not simply assume, that what we are doing is worthwhile;

2. We need to apply our resources prudently;

3. We need to be satisfied that we are making (or can reasonably expect to make) a difference to an extent that justifies the resources applied.

4. We need to convince our own specific audiences that we are doing this; and

5. We need to foster at all levels of our organisations the strong values that underpin charitable impulse and endeavour.

I will turn to values in a moment but first of all I want to consider who our specific audiences are – who we have to convince. We do not need to convince the world at large. We do not need to convince the politician who, for example, thinks that campaigning charities are not real charities at all (I’ve met him); or whoever else doesn’t like our cause or the way in which we pursue it. Charity can be, and certain charities should be, controversial. If we try to be all things to everyone, we will very easily end up being little to anyone. Our specific audiences are:

Our supporters and potential supporters

Our beneficiaries

Our staff

Ourselves

If we can convince those people, we maintain or retain trust to the extent that we can. Slowly, that has its impact on the sector as a whole. And I think that bit about convincing ourselves is very important. It is one of the first rules of leadership. If we are not sure and if we have not asked ourselves how and why we are sure, how can we convince others? It has been very wisely and wittily said that you can’t lead a cavalry charge if you think you look funny on a horse.

It is not easy for a group of volunteer trustees who meet relatively rarely to reach a sufficient level of certainty about how effectively resources are being used, for example. But an excellent draft Charity Governance Code is being launched today for consultation and there is a great deal of good guidance in there about how we can govern effectively. I hope that everyone here will take it back to their organisation, engage with the consultation and begin to use the document effectively.

A paragraph in the new code that really struck me is in the section on leadership and it concerns values. In order to lead by example, boards are asked to agree the values they wish to promote and make sure that those values underpin all their discussions and all the charity's activities.

I imagine that many of our charities have got to the stage of creating a values statement. All the charities in the list of most and least trusted charities from the Charity Commission's recent research have some kind of values statement on their website. However, I was interested to see how few of those statements covered all of the fundamental values that I think define charitable impulse and endeavour. To me, these are:

Compassion

Altruism

Generosity

Trustworthiness

Integrity

Dedication

Respect

Others will have other lists, but that is mine.

Many of the websites I looked at identified many of those values in one way or another and indeed they identified other appropriate values as well. But it was noticeable that "integrity" and "trustworthiness" were both used only once; and "respect" only three times. These are vital values in securing trust and confidence.

It is not that I think those charities do not possess those values or that they think them unimportant but I suspect that those values are simply assumed; taken for granted. Commercial businesses that consider themselves socially responsible do not take these matters for granted although the people in them may have no less integrity, trustworthiness and respect. I was looking at the values statement on the website of a new commercial client last week and they say that the values that underpin their business are:

Trust

Integrity

Empathy

Humility

Respect

Wouldn't we all like to think that our organisations were underpinned by those values? I imagine some might say, "Ah, well they are in the commercial world and they have to try harder to prove those things." Others might say there really isn't any need to write down those values because of course our charities stand for those things. I would ask anyone who thinks that, both to put aside any cynicism and prejudice about commercial organisations and to ask themselves whether the behaviour among some charities that has caused so much mistrust has really exemplified those values. Might it not be said, for example, that some fundraising approaches were no more than Machiavellian examples of the ends being thought to justify the means? Where is the integrity and respect in that?

In an imperfect world, and imperfect as we are, we all struggle from time to time live up to the values we believe in and seek to uphold. There is therefore great merit in us ensuring that the values we may otherwise take for granted, are stated clearly and succinctly, discussed and reviewed so that everyone from Chair of the Board to junior fundraising assistant has them at the forefront of their minds when going about their business.

Ensuring everything we and our organisations do is infused with the values that we have and that are expected of us is one of the highest callings of leadership. It is the kind of leadership that is needed now more than ever in this sector.

Have our priorities changed? No; our core priorities will always be the needs of our beneficiaries. Do we need to change? Some of us, maybe. Let’s take that fresh, close look at what we are doing, why and how. Let’s feel confident we don’t look funny on a horse; and let’s ensure that that we are providing values-driven leadership.